Congress plans spending binge

By By Jill Zuckman

Sep 29, 2001 | 12:00 AM

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Since terrorist hijackers struck the country Sept. 11, Congress has responded by opening wide the nation's wallet.

Lawmakers have spent billions of dollars to bolster the military, rebuild New York and the Pentagon, bail out airlines, and compensate victims. There's more to come, as Congress plans to beef up airport security, stimulate the economy with further tax breaks and fund the basic functions of government with billions more than previously planned.

And as the spending revs up, lawmakers in the House and Senate are racing to get their pet ideas financed, whether that means shoring up Amtrak or bailing out other sectors of the economy, from the travel agents to the hotels to the car rental and insurance companies.

But resistance and warnings are arising from a few pockets on Capitol Hill now that the federal budget could be on the verge of returning to big deficits.

"We're losing all restraints now," said Sen. Peter Fitzgerald (R-Ill.), the only senator to oppose a $15 billion airline bailout package. "There's an attitude here that they've crossed the Rubicon and what does it matter if we spend that money. I don't agree with that."

Sen. Don Nickles of Oklahoma, the assistant Republican leader, said he opposes efforts under way to federalize some airport workers and to provide extended unemployment and health-care benefits to laid-off airline employees.

Nickles argued in bicameral, bipartisan leadership meetings that the airline bailout package should not include an unlimited victims' compensation fund. He was overruled.

"If we keep saying, `Oh, let's pass a bill, who cares how much it costs,' that would be irresponsible," he said.

Sen. John McCain (R-Ariz.) said he will propose setting up a board like the one Harry Truman ran in World War II to examine how federal dollars are being spent on defense.

"We need very scrupulous oversight," said McCain, long concerned about budget padding and pork projects.

In the House, Rep. Barney Frank (D-Mass.) has filed a bill to rescind part of President Bush's tax cut. He would leave the top rate at 39.6 percent, rather than cutting it to 35 percent as was enacted.

Frank said the tax cut takes money away from Social Security, Medicare and other social programs and priorities following the Sept. 11 attacks.

Both parties have spent years competing for the mantle of most fiscally disciplined as deficit spending was replaced by surpluses and debt reduction.

Now with the economy tottering and the armed forces preparing for war, many of the usual budget hawks are not complaining.

"If it's about making the nation safe and secure, we will spend what it takes," said House Majority Leader Dick Armey (R-Texas), a former economist.

Said Sen. Kent Conrad (D-N.D.), who is chairman of the Senate Budget Committee and usually known for his parsimony: "In a circumstance like this, defending the nation is our first priority, along with rebuilding and preparing to counterattack."

Some lawmakers would go further.

"We should be spending more," said Sen. John Breaux (D-La.), who wants to stimulate the economy with more tax cuts and greater federal spending.

Asked if he was concerned by the large amounts of money leaving the federal Treasury, Sen. Robert Bennett (R-Utah) was terse: "Considering what it's going for, no."

Indeed, past legislation to rein in deficit spending always contained an out for emergencies. While the old Gramm-Rudman bill cut all discretionary spending across the board to eliminate the deficit, it rescinded those cuts in times of war and recession.

Appropriators on both sides of the aisle have been wrangling with the administration for weeks over how much to spend on education and other programs next year, with Congress preferring to spend more, and the administration, less.

Budget deal `very close'

On Friday, Congress and the White House were said to be close to announcing a deal that would provide $686 billion for discretionary spending--a $25 billion increase over Bush's original budget proposal.

"We are very, very close on it," said Ari Fleischer, the White House spokesman. "And while they're getting very close on the level of funding, as I indicated, there are going to be additional talks going on that are still under way."

Holding up the agreement, however, was concern by Democrats that Republicans would unfairly attack them in the midterm elections for boosting Bush's spending requests.

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